Stock Rally Flags With S&P 500 on Brink of Record: Markets Wrap

(Bloomberg) — Stocks took a breather on Thursday, stalling a three-day rally that had taken US and European stocks to within striking distance of all-time highs.

US equity futures slipped after the S&P 500 closed on the brink of record peak, propelled by optimism over artificial intelligence and a batch of earnings from corporate heavyweights. Contracts on the Nasdaq 100 fell 0.5% and those on the S&P 500 were down 0.2%.

A rally on Wall Street showed signs of flagging as investors took stock of President Donald Trump’s first few days in office. While his move to boost AI spending buoyed tech megacaps on Wednesday, the risk of tariffs on major trading partners still weighs on sentiment. The S&P 500 index has climbed about 5% since Trump’s election victory on Nov. 6.

“We continue to expect near-term volatility as markets react to incoming Trump headlines, and see negative impact on targeted regions if the administration follows through with the proposed tariffs,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “But we also believe US equities have room to grind higher as growth momentum continues.”

Focus next turns to US jobless-claims data, as well as Trump’s address at the World Economic Forum in Davos and fourth-quarter earnings reports from General Electric Co. and Texas Instruments Inc.

American Airlines Group Inc. slid 8% in premarket trading after forecasting a surprise first-quarter loss, breaking from rival carriers cashing in on unusually strong winter demand and pricier domestic fares. By contrast, Alaska Air Group Inc. forecast a smaller-than-expected loss in the first quarter. 

Markets have started the year in an upbeat mood amid relief that Trump has so far held off on imposing tariffs on trade partners in his first few days in office, despite threatening levies on China, Mexico, Europe and China.

Still, there are signs the rally could be overheating with valuations at sky-high levels, especially those of tech behemoths. 

“There’s a loss of momentum,” said Paul Jackson, global head of asset allocation research at Invesco, “There’s a lot of hope, a lot of good news already priced in the US markets.”

Yields on 10-year Treasuries rose three basis points to 4.64%. A gauge of the dollar edged higher. 

European technology shares fell more than 1%, giving up most of the previous day’s advance as they underperformed every other industry group in the Stoxx Europe 600 index. Puma SE plunged after the German sportswear maker missed earnings estimates.

Key events this week:

• Eurozone consumer confidence, Thursday
• US jobless claims, Thursday
• Bank of Japan policy meeting, Friday
• Eurozone HCOB Manufacturing & Services PMI, Friday
• US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.2% as of 7:13 a.m. New York time
• Nasdaq 100 futures fell 0.5%
• Futures on the Dow Jones Industrial Average were little changed
• The Stoxx Europe 600 was little changed
• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.1% to $1.0395
• The British pound fell 0.1% to $1.2301
• The Japanese yen was little changed at 156.59 per dollar

Cryptocurrencies

• Bitcoin fell 2.2% to $101,765.51
• Ether fell 1.8% to $3,201.33

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.64%
• Germany’s 10-year yield advanced one basis point to 2.54%
• Britain’s 10-year yield advanced one basis point to 4.65%

Commodities

• West Texas Intermediate crude rose 0.4% to $75.73 a barrel
• Spot gold fell 0.3% to $2,747.02 an ounce

This story was produced with the assistance of Bloomberg Automation. 

–With assistance from Michael Msika and Divya Patil.

©2025 Bloomberg L.P.